Accident:
This refers to an unexpected event like an Accident involving a vehicle or vehicles and or personal injury or fatality.

ABI:
The Association of British Insurers. It is the organisation that decides on insurance industry standards and code of practice.

Accidental Damage Cover:
This is a form or insurance that protects against damage to goods not loss or theft but that get damaged due to unforeseeable factors. It usually covers vehicle contents that are stolen or damaged.

Act of God:
This refers to an accident that happens in extraordinary circumstances that could not have been foreseen. For example, damage caused by a storm would fall under the 'Act of God' umbrella. Hence, it is advisable not to drive in rough weather. Being struck by lightning is an ‘Act of God’.

Advance Payment:
This refers to up-front payment.

Agent:
A person who acts on behalf of another person. For example an insurance salesman is an agent of an insurance company. A individual who works in an insurance broker firm is also an agent of the Insurance Broker Company who is responsible for his or her actions in relation to your arrangement, advice or negotiations in respect of arranging your insurance.

Annual Policy:
This refers to an insurance policy that is applied throughout the year round and not limited to any specific period.

Any Driver:
This refers to any driver that drives the given vehicle not necessarily the owner so long as he has permission to use the car.

Approved Repairer:
refers to a repairer recommended by the insurance company to repair insured car.

Applicant:
The person who applies for a credit or a financial service or for car insurance or any other form of insurance.

Actuary:
A professional who is trained in the technical aspects of insurance and who uses complex computerised mathematical methods to provide analysis of claims, data and other statistics for the insurance company to calculate premiums.

Applied or Nominal Interest Rate:
This refers to the percentage rate used to calculate interest due.

Arbitration:
This refers to when two disputing parties come to a consensual conclusion following a period of ‘Arbitration’ which could involve a third party to help the negotiations come to a mutually agreed state.

Arrears:
This refers to a late payment or payment after the event.

Arrears Fee:
This refers to an imposed administration fee that is added by a company, which it will refer to as its charge for any late payment.

Bilateral Contract:
Also referred to as a "reciprocal" contract. This means that the parties concerned and involved give mutual promises to each other like abiding by certain sets of terms and conditions.

Bona Fide:
It refers to actions or persons that are honest and in good faith.

Breach of Contract:
This refers to when one party or the other breaks a rule of the agreement and is in "Breach" of that agreement ie when one party fails to honour its side of the agreement without a legal excuse. For example if the policyholder refuses to pay the premium for no good reason justifiable legally then he or she would be in breach of the agreement.

Breakdown Cover:
This refers to a type of insurance policy that provides recovery and repair services for motorists.

Beneficiary:
This refers to a person or company who is a recipient of a benefit. For example a beneficiary of a dead persons will is the person who will receive the money / house or assets of that dead person

Benefits:
This refers to money paid out to a claimant by insurance company or a list of terms within a policy which states what the policy will cover the policy holder, for example to pay a benefit for loss or damage to a car – or to pay a benefit in terms of cash for compensation for injury or personal loss.

Broker:
This refers to an agent that is independent and brings together two parties for a contract and in turn receives a fee such as an insurance company and a policyholder

Capacity:
This refers to the financial limit or to the largest amount of insurance or reinsurance available from an insurance company or that is available in the marketplace. The limit of how much it can insurer before it reaches it capacity.

Cash surrender value:
This refers to a capital amount in cash that can be received by a policyholder when he/she surrenders an insurance policy that has a built in capital surrender value. For most car insurance policies this is zero, although some insurers may refund some of the premium paid if a policy is cancelled early. This is at the insurance companies discretion.

Cancellation Clause:
This refers to a condition of the contract whereby the insurer or the insured can cancel a policy before its expiration date.

Collision Damage Waiver:
This refers to an extra insurance premium that removes the liability to pay any insurance excess in the event of a collision or damage to a vehicle such as a hire car.

Comprehensive Cover:
This refers to the most comprehensive of car insurance policies in the UK. It covers damage to others' cars and to policyholders car as well as losses incurred by fire and theft. This is normally obligatory for new vehicles and is advised to be the normal policy taken as it covers all parties involved in an accident including vehicles.

Conditional insurance:
This refers to an insurance policy to which mortgage borrowers can sign up with the lender in order to take out a specific mortgage.

Consequential loss:
This is also known as indirect loss. It is a financial loss occurring as the result of some other loss.

Coveats: (Latin term)
It refers to conditions of an insurance quote. Caveat Emptor [Let the Buyer Beware] A caveat is a condition or term which may be prejudicial to either party and should be understood and is agreed by both parties

CII:
Chartered Insurance Institute. This is the governing body for the Insurance Industry in UK.

Claim:
This means a notification to the insurance company that an incident has occurred and or a payment is due.

Co-insurance:
This refers to a group of insurers that cover a risk together and who take a set percentage of the cost of claims so as to spread the risk. This would normally be the case for large projects, developments, building complexes, risky ventures etc.

Conditional Insurance:
This refers to an insurance policy based on certain condition.

Conditions:
This refers to the details of rights and duties of insurer and insured.

Contract:
This refers to a legal agreement between two parties.

Cooling off Period:
This refers to a set period of time in which a personal can cancel the agreement without incurring any penalty.

Cover:
This refers to the risk that the insurance policy protects policyholder against.

Car Insurance:
This refers to 'legal contract' between an insurance company and insured policyholder that provides a legal protection to car against loss due to theft or traffic accidents. The 'insurer' is usually an insurance company and the 'insured' is often the owner of the car.

Declination:
This means the rejection of an insurance application by an insurance company.

Default:
This refers to where the insurance premium or a series of premiums have not been paid by a policyholder.

Deposit Premium:
The premium deposit paid when an application is made for an insurance policy.

Disclosure:
This is the duty of a person applying for an insurance policy to tell the insurer all relevant information affecting the risk, such as prior claims and history.

Excess:
This means the amount of money the policyholder will have to pay in the event of a claim.

Exclusions:
This refers to items and possessions that are not covered by insurance policy.

Financial adviser:
This is a person or a company that is regulated by the FSA to advises individuals or companies on their financial situation.

Grace Period:
This refers to the period that commences after last date of premium payment. In this period, the policyholder can still make late payment as well as continues to be covered by the policy.

Green Card:
This a document issued to people motoring abroad as evidence that they have the legal minimum insurance cover required.

Gross Premium:
This refers to the to the total premium paid or discount is taken into account.

High-Risk Occupation:
This refers to the occupation of the policyholder and to those who engage in a high-risk job that could make the person more likely to have an accident. Some Car insurance companies will exclude people with these jobs or charge higher premiums during insurance.

Income Protection Insurance:
Some Car insurers offer this type of cover as it provides protection to policyholder if he or she is unable to make payments on an outstanding agreement due to incapacity or unable to work, this is especially relevant to self-employed persons.

Insurance Group:
This is the grading method used by all insurance companies to assess the risk and classify vehicles from 1 to 20 [20 being the highest risk and cost]. Vehicles such as Bentley and Sports Cars such as a Ferrari would be group 20 vehicle.

Premium:
This refers to the amount of money the policyholder has to pay the insurance company to have the cover. This can be paid annually or by instalments which can cost a little bit more money.

Indemnity:
This refers to the principle whereby the policyholders are put in the same financial position after a loss as they were immediately before it. To indemnify means to ensure they will be no worse off.

Insurance:
This is the agreement where an insurance company is offering to provide protection for individuals, businesses, and other organisations, in exchange for payment of a sum of money (a premium), are guaranteed indemnity for losses resulting from certain events or conditions specified in a contract (policy).

Insured car:
This refers to the specified cars / vehicles that are insured by the insurance company as specified on the policy documentation where it will detail the make and registration number. Some motor insurance policies insure the vehicle, and some insure the driver.

Insurer:
This refers to the company that has contracted to provide the policy and who is to pay for loss or benefits to the policy holder. It is usually an insurance company.

Lapse:
This refers to when the policy has ceased to be in force and has ‘lapsed’ It refers to the termination of an insurance policy due to non-payment of the premium.

Legal Expenses Insurance:
This refers to companies that cover the costs of private legal action of the 'insured'.

Loading:
This is a term that denotes the amount of additional charge the insurance company is adding to the standard premium for their insurance. This is normally applied if the policy holder has a bad claims experience from previous insurance and age and even gender or high risk occupation.

Loss:
In the insurance industry this is the term that refers to the incident that has caused you to make a claim ie for being robbed, burgled, injured or in a car accident. A loss gives rise to a claim.

Loss Adjuster:
This refers to a company that is independent third party that may be used by an insurance company to assess the value of a claim when there is a disagreement between the insurer and the insured.

Main Driver:
This means the person who is the main driver of the insured vehicle or the one who drives it the most.

Market Value:
This refers to the ‘market value’ to the cost of replacing the car with one of a similar make, model, year, mileage and condition, based on market prices at the time of the loss. This does not mean what you paid for the car it means what it would be to replace the car in today terms

Material Fact:
This refers to any information that could affect an insurance company's willingness to accept a policy and the premium it would charge. It is your responsibility to disclose ALL material facts to the insurer at the point of application for instance, if you are disabled and fail to inform the insurance company this would be classed as a material fact and If you fail to disclose a material fact this could invalidate a policy and gives the opportunity to the insurance company not to pay out if make a claim.

MBI:
This refers to Mechanical Breakdown Insurance policies, which are also known as extended warranties for cars. This type of insurance policy provides with compensation if certain faults arise with a car. This type of policy is normally offered with second hand cars outside of manufacturers warrantees

MIB:
Motor Insurers' Bureau. This is the body that deals with claims for personal injury compensation when the driver at fault is not insured, or cannot be traced.

Motor Schedule:
This refers to the document that shows the details of the insurance policy, excesses, endorsements and premium that is specific to the policy holder and should be read in conjunction with the insurer's policy wording.

Named driver:
This refers to the persons who are ‘named’ to drivers who are permitted to drive the vehicle who are not necessarily the vehicle owner.

NCB:
No Claims Bonus. This is the discount that policyholder gain from every year they do not make a claim and will increase up to a maximum level of discount which can be transferred from one insurance company to another.

Ordinarily Resident:
This refers to a person who has been a resident in the UK for some years Most UK insurance policies require 'ordinarily resident' as a criterion for issuing insurance.

Period of insurance:
This refers to the duration of the insurance time covered by the policy.

Policy:
This refers to the legal document that is issued by the insurance company to the policyholder that states the terms and conditions of the insurance. It is also called as policy contract or the contract.

Policy excess:
This refers to a policy where an amount is to be paid by the policyholder in the event of a claim. The policy excess is frequently increased for younger drivers for accidental damage claims.

Policy exclusions:
This refers to those events or instances that are not covered by insurance policy.

Policyholder:
This refers to the person to whom the insurer issues the policy.

Premium:
This refers to the money you pay either in one go or by instalments to the insurance company in respect of an insurance policy.

Quotation:
A quotation mean the offer in writing made by the insurance company or by the broker on behalf of the insurance company, which contains details of the conditions, benefits, caveats and premiums for the policy. Quotations are provided to show the costs of insurance cover and the quotation document forms the basis of a new contract.

Quote:
This refers to the cost that a company or a repairer estimates to be the cost of providing a service based on the available information. An estimate can vary but a quotation should be agreed and fixed. It is best to qualify the price given to you is not an estimate and is a fixed quotation.

Rate:
It is the pricing factor upon which an insurance premium is based.

Registered Keeper:
This refers to a person who looks after a vehicle, who may not necessarily be the owner. For example, you may use a car that is owned by someone else in which case you would be the registered keeper a company car for instance would be owned by the company but the employee that drives it would be the registered keeper.

Settlement:
This is the term referred to describe a situation when an insurer pays a claim to the insured.

Third party:
This refers to basic cover insurance where the policy will ONLY pay out for damage caused to other cars and owners but NOT to the policy holder neither does it cover for Fire or Theft of the policy holders car.

Third party, fire and theft:
This refers to insurance cover as Third Party with the additional cover for Fire and Theft of the policyholder’s vehicle but will not pay for damage to the policyholders vehicle in the event of an accident.

Total Loss:
This refers to when in the Insurance Companies opinion it is not economic to repair the car following an accident, theft, or when the car is stolen and recovered and either it is impossible to repair. In which case they will make an offer of money instead which is normally lower and closer to the market value of the vehicle insured.

Tracker:
This is an electronic device that is normally fitted as an accessory after the purchase of the vehicle. It emits a signal enabling law enforcement agencies to locate the car anywhere in the UK if it has been stolen.

ULR:
Uninsured Loss Recovery. This is an additional insurance protection policy that helps a policyholder to recover the uninsured losses including repair costs, policy excess, loss of use, hire costs of alternative vehicle and transport costs etc.

Under-Insurance:
This refers to where a policyholder insures his car at much lower rate than the original price of the car.

Voluntary Excess:
This is the amount that policyholder choose to bear in addition to the policy excess that has to be paid in the event of a claim. Policyholder can usually select the amount of voluntary excess he/she is prepared to pay. If he/she decides to pay an additional (voluntary) excess it would normally mean that the premium would be reduced.